The China Consumer Price Index and the China Producer Price Index that are released by the National Bureau of Statistics of China have been released as follows:

• China CPI YoY Dec: 1.8% (est 1.8%, prev 1.6%).
• For the MoM: 0.0%
• China Producer Price Index YoY Dec: -0.7% (est -0.1%, prev -1.3%).
• For MoM: -0.5%.

AUD/USD update

The outcomes have failed to move the needle in AUD/USD which sits at 0.6918 in quiet pre-US CPI event markets. 

On Wednesday, however, AUD/USD rallied on the knee-jerk to the Aussie data dump as follows: 

• Aussie data dump (Nov): Data comes in hot and sends AUD higher

The move was faded above 0.6900 and bears moved in at the high of 0.6925 in choppy conditions as the markets get set for the US Consumer Price Index. 

The analysis above assumes that distribution could be playing out into US CPI critical event.

While below 0.6950, the bias is to the downside for the near term. A break of 0.6870 will open the risk of a move into the 0.6800 figure and the targetted area between 0.6791 and 0.6748. 

About China CPI

The Consumer Price Index is released by the National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services. The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index. The purchasing power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People’s Bank of China to tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY.